10 Hidden Drawbacks of 401(k)s That Will Leave You Speechless

Limited Asset Classes

If you purchase investments in an IRA or a standard taxable account, you are generally allowed to invest in almost anything you want, from stocks and bonds to mutual funds, ETFs, CDs, gold and commodities. What’s more, cryptocurrencies, emerging market bonds or limited partnerships are also up for grabs.

When it comes to a 401(k), you have limited options and can only choose the asset classes outlined by your plan. In most instances, you’ll only be able to access investments such as large-cap stocks, small-cap stocks, investment-grade bonds and Treasury securities. Given that most 401(k) plans include the largest part of your nest egg, it can be a huge setback for your retirement plans.

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